2009: What lies ahead for Indian LPO Companies?

Beginning of a year is always marked with speculations, predictions, plan of actions, strategies and above all hope for a better future ahead.

2009 for LPOs in India is one such year that will probably be filled with more business and hence more profits. If figures are considered to be a reliable source for a factual depiction of the reality, then the estimates given by Forrester Research project a boom for the legal outsourcing sector. They have estimated that legal outsourcing to India will reach $4bn by 2015. In fact till 2007, according to ValueNotes calculations, spending on legal offshoring to India had reached $124mn. Now companies are paying attention to not only the gross figures of the industry but also to the nuances involved in its’ functioning. An indicator for this growing interest is the attendance level seen in the annual meeting of Association of Corporate Counsel in which two sessions were on offshoring. There were only few vacant seats! With ABA’s positive opinion about offshoring of legal work also coming in 2008, the offshore providers of legal support services couldn’t ask for more.

The seismic waves of these events have affected Indian LPOs in a big way. India is the most popular destination for offshore services. Owing to its huge talent base, time zone and favorable government policies, Indian companies have always received good business from their offshore clients. The subprime crisis in the U.S., which has negatively impacted the world economy, is bringing exodus of work to the LPOs, thus, generating windfall gains for the Indian LPO firms. This marked increase in the business is not only because of the economic pricing of the services by the vendor but also attributed to the quality given by them. Companies such as CPA have achieved ISO 9001:27001 quality management system (QMS) certification and ISO/IEC 27001:2005 information security management certification (ISM) certification. These international standards are accepted by all and provide a framework for consistent and effective quality management. Such steps have encouraged the companies to outsource more than the low-end or routine work to the offshore units. Microsoft had started with proof reading of patent applications in 2004. They have with time increased the technical and critical level of their outsourced jobs. Martin Shivley, Associate General Counsel, Director, Worldwide Intellectual Property Operations Microsoft, decided on the basis of quality, time delivery, cost-effective and other aspects to offshore their other tasks. In India they are working with CPA, headquartered in Jersey Chanel Islands, which has now also been given to perform invalidity studies and patent landscape analyses.

The recent economic slump down has brought in a lot of litigation work. As a result one can witness the human resource departments of the companies busy round the clock in hiring and retaining their employees. There is a prospective demand of 15,000 jobs in the legal outsourcing sector in the coming 2 years. UnitedLex Vice President, HR, Rakhi Sharma, intends to hire 800 people by March 2009. Bhaskar Bagchi, country head, CPA has set the target of 2,000 employees by 2010. Even the average salary benchmark has increased by an average of 30–45%. To control attrition rates companies are devising new and innovative ways to retain their workforce. Bagchi said “At CPA, we handed out bonuses and increments, starting at 15% and upwards. For 2009, we have a healthy order book and the benefits will only get better for employees.”

Overall, we can say that new avenues, increased business, more emphasis on quality and employee centric policies would be the areas of focus for the Indian LPOs in 2009. Wish you all a happy working and successful new year!

-Megha Pande